WellCare
WCG, +0.77%
said a settlement with the Centers for Medicare and Medicaid Services in Georgia cut into its premiums by $18 million and higher-than-expected claims in previous quarters for its Kentucky Medicaid program impacted the bottom line for the current period.

The company said net income was $38.3 million, or 87 cents a share, for the quarter, dropping by more than half from the $88.3 million, or $2.03 a share, from the same period a year ago. Revenue for the Tampa, Fla.-based insurer was $1.82 billion against last year’s $1.54 billion.

Adjusted income was $1.05 a share, but analysts polled by FactSet had expected earnings of $1.48 a share on sales of $1.83 billion.

As a result, WellCare also cut its outlook for fiscal 2012 to a range of $4.90 to $5.05 earnings per share, down from $5.25 to $5.45 a share. The FactSet prediction had been for $5.41 a share.

Shares plunged by nearly 14% to $47.60 at the close.

Meanwhile, two hospital companies had diverging third-quarter results with predictable outcomes for their stock prices.

Universal Health Services Inc.
UHS, +1.04%
shares fell more than 3% to $41.40 after the company’s earnings fell short of forecasts.

Universal said net income was $71.8 million, or 73 cents a share, for the quarter, compared with $85.1 million, or 86 cents a share, for the same period a year ago. Sales for the King of Prussia, Pa.-based company were $1.68 billion against last year’s $1.66 billion.

Adjusted earnings were 91 cents a share. Analysts polled by Thomson Reuters had expected earnings of 99 cents on sales of $1.78 billion.

The company said a sluggish economic recovery was weighing on results at its acute-care facilities and it expects that trend to continue through the fourth quarter.

Universal subsequently lowered its forecast for the full year to a range of $4 to $4.10 a share, down from its previous range of $4.25 to $4.35 a share. The Thomson Reuters estimate had been for $4.28 a share.

But Community Health Systems Inc.
CYH, +0.96%
got a boost after it reported earnings that narrowly beat estimates, and said full-year earnings should be ahead of forecasts.

Community Health said net income was $44.2 million, or 49 cents a share, compared with $74.3 million, or 86 cents a share, for the same period a year ago. Revenue for the Franklin, Tenn.-based company was $3.21 billion against last year’s $2.95 billion.

Excluding a one-time charge for debt extinguishment, adjusted earnings were 86 cents a share, 2 cents ahead of estimates from Thomson Reuters. Revenue was slightly ahead of forecasts. The company said it expects full-year operating income to end up between $3.80 and $3.95 a share. The Thomson Reuters forecast stands at $3.67 a share.

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